A more rational and less profane analysis of the CMS report

than what I posted a few days ago:

Hat tip: American Spectator, emphasis mine

In the rest of the 38-page report, actuary Richard Foster confirms many of the arguments conservatives have been making throughout the health care process. For instance:

-- By delaying the major spending provisions until 2014, Democrats hid the true 10-year cost of their legislation: “Because of these transition effects and the fact that most of the coverage provisions would be in effect for only 6 of the 10 years of the budget period, the cost estimates shown in this memorandum do not represent a full 10-year cost for the new legislation,” CMS says.

-- Medicare cuts are unlikely to materialize: The CMS report cautions that “it is important to note that the estimated savings shown in this memorandum for one category of Medicare provisions may be unrealistic.” The reason is that if the proposed cuts to payments to hospitals, nursing facilities, and home health agencies go into effect, “roughly 15 percent of Part A providers would become unprofitable within the 10-year projection period...” The only way to resolve this problem would be to prevent the cuts, which in turn would eat up some of the projected savings from the legislation.

-- You can’t double count the Medicare savings: While in theory Medicare Part A cuts would extend solvency of the program by 12 years, the actuary writes, “In practice the improved (Medicare hospital insurance) financing cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions) and to extend the trust fund, despite the appearance of this result from the respective accounting conventions.”

-- The CLASS Act is a ponzi scheme: One of the most under-reported aspects of the new health care legislation was that it creates a smaller new entitlement within the massive entitlement – a program pushed by Ted Kennedy that would allow individuals to purchase long-term care insurance through the government. But the program begins collecting premiums before paying out benefits, making it produce surpluses in the early years that Democrats claimed as deficit savings. However, CMS notes that, “After 2015, as benefits are paid, the net savings from this program will decline; in 2025 and later, projected benefits exceed premium revenues, resulting in a net Federal costs in the longer term.”

The report goes on to say that the CLASS program is likely to be used by those with more health problems, meaning it faces “a significant risk of failure as a result of adverse selection of participants.”


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I mean, honest to God, Trig Palin could have figured out that none of this shit was going to work as promised.